Carbon removal is the process by which humans actively and intentionally remove carbon dioxide (CO2) from the atmosphere and store it in longer-lived reservoirs.
Organizations and institutions can invest in carbon offsets, which are greenhouse gas (GHG) reductions spearheaded by projects all over the world. By investing in emission reduction projects, we can limit the net release of GHGs into the atmosphere.
What are carbon offsets?
To limit the impacts of climate change, institutions across the world must reduce their use of fossil fuels and minimize the release of GHGs in to the atmosphere. In some cases, people and institutions can adapt their practices to reduce emissions, but it can be difficult to rapidly implement these changes. Because institutions still want to do their part in combatting climate change, they can invest in carbon offsets (also known as "verified emission reductions" or "carbon credits") which are GHG reductions spearheaded by projects all over the world. Since GHGs have the same impact on the climate regardless of where they are emitted, investing in emission reduction projects anywhere in the world is a valid practice to limit the net release of GHGs into the atmosphere.
“A verified carbon offset is an additional reduction or a removal of one metric ton of carbon dioxide or an equivalent greenhouse gas from the atmosphere that has been undertaken voluntarily, measured, and verified by an accredited third party,” explains Austin Strayhorn (YC ’19), Ecosystem Success Associate with Third Derivative.
There are systems in place to ensure that the GHG reductions at these offsite projects are legitimate, and there are many different types of carbon offset projects that make an effort to limit the amount of GHGs that enter the atmosphere and trap heat.
Carbon offsets are a way for organizations
like Yale to help fund projects happening
around the world. These projects use the funds invested to make and verify greenhouse gas emissions reductions or removals and justify the project investment. These projects get going knowing that someone will buy those offsets to mitigate, or compensate for, their own carbon footprint. It’s a market-based approach that can help project developers move more quickly to mitigate
Anastasia O’Rourke (Ph.D. ’09), Managing Director of the Yale Carbon Containment Lab who has led a Working Group that purchased carbon offsets for Yale.
How do carbon offsets actually work?
As a market-based mechanism, carbon offsets can be bought, sold and traded before they are retired to meet a reduction goal. There are many steps that are taken along the way to ensure that any purchased carbon offset truly limits or reduces the emission of GHGs. Below is a summary of the key steps taken for a carbon offset project to get off the ground and sell credits to institutions across the world:
An organization recognizes an opportunity to reduce or remove GHGs. These projects typically require additional funding to get started. For example, a forestland owner could realize they can preserve more CO2-in their trees than harvesting the timber, or a landfill owner could, with some financial support, place carbon-capturing devices on anaerobic digesters.
How are organizations using carbon offsets to meet their climate goals?
Let’s say Company A wants to have “net zero emissions” within the next decade. This means that in total, through the company’s combined operations, it must emit zero GHGs into the atmosphere within the next decade. This is a great goal for companies to have, as it suggests that the organization is not releasing GHGs into the atmosphere that worsen the impacts of global warming. However, Company A still relies on fossil fuels as an energy source, or refrigerants as a coolant, and cannot be completely independent of the associated emissions in the next ten years. Is their net zero emission goal too lofty?
No! Even though this organization cannot make the changes onsite fast enough to operate completely net zero in the next decade, they can count the purchase and retirement of carbon offsets towards their emission reduction goal. For instance, as Company A is trying to decrease its use of fossil fuels, it still ends up releasing 40,000 tons of CO2 into the atmosphere. For Company A to be net zero, it can purchase 40,000 tons worth of carbon offsets, which means that 40,000 tons of CO2 is being withheld from the atmosphere at another location. Because Company A has purchased and retired these credits, it can count the 40,000-ton reduction as its own and be at a net zero position. As long as they are registered and retired from the market, no-one else can use the credits.
Why can carbon offsets sometimes be controversial?
Although carbon offsets provide an opportunity for individuals and institutions across the world to help reduce the global GHG footprint, they can be complex to administer and draw criticism. The Offsets Guide highlights that there are two primary criticisms of carbon offsets:
1. PAYING INSTEAD OF DOING
Many are concerned with the fact that companies can take credit for emission reductions instead of changing their GHG emission practices. For instance, some are fundamentally opposed to the notion of Company A claiming to be net zero, even though it is emitting 40,000 tons of GHGs onsite. Although Company A still emits GHGs into the atmosphere, the purchase of real, verified carbon offsets suggests that somewhere else, an equivalent of 40,000 tons of GHGs are being sequestered. Theoretically, Company A is making strides to use more renewable energy sources and ultimately be net zero onsite. Carbon offsets are a tool it can use to help it along the way.
“I don't think that offsets should be solely relied on to fight climate change, and they really can't be,” Strayhorn adds. “Climate change is too big of an issue and the reductions that we need are much greater than offsets alone could provide – we also need significant carbon reduction, removal and storage. But when it comes to the current regulatory and incentivization framework within our own government system, we just aren't at a place where we could shift to one-hundred percent green energy tomorrow. In the interim, offsets are the bridge to the permanent solution.” As such, many organizations use carbon offsets to complement their in-house efforts to reduce their GHGs.
2. PROJECT CREDIBILITY
Although offsets projects must be verified and monitored using scientifically rigorous protocols and standards, many still express concerns about the legitimacy of some offsetting projects or of the standards themselves. Some claim that the projects are not truly limiting the release of GHGs into the atmosphere, or doing anything other than business as usual. For instance, a project could have limited the emission of GHGs without the financial incentive of carbon offsets; or the calculated number of generated carbon offsets from a project might be biased so credits are over-issued. Several environmental researchers have found flawed carbon offsets projects that do not truly produce valid offsets (Alexeew et al. 2010, Cames et al. 2016, or Haya and Parekh, 2012). It is important to thoroughly inspect any carbon offsets you consider purchasing to ensure that this concern does not arise. See below on where to start.
There are several different types of carbon offsets projects, reducing emissions in four key ways:
Providing infrastructure to produce clean, renewable energy in regions where it is not already prevalent;
Reducing emissions in industrial processes;
Destroying greenhouse gases before they are emitted into the atmosphere; and/or
Removing and storing GHGs, preventing them from being released into the atmosphere.
Each individual project is governed by a different set of standards, protocols, and verification requirements. Additionally, prices for carbon offsets tend to vary for each of the different project types.
What types of projects are supported by carbon offsets?
Example Carbon Offset Projects
Laurelbrook Farm Dairy Manure Advanced Separation Project: Livestock Methane
East Canaan, CT
This dairy farm seeks to limit the release of methane from cow manure. This project adds wood chips to manure solids to create compost, which permanently prevents methane from being emitted.
If I want to buy carbon offsets for myself or my organization, where should I start?
If you are interested in purchasing offsets, you could consult with a retailer with information on the different projects they have available, along with pricing. Typically, offsets will cost between $5-$20 per Metric ton of GHG reduction. For further information, each project has documentation on the registry under which the project is listed such as project descriptions, ownership and verification information. When considering a larger purchase of offsets, there are several things to consider, including:
1. HOW WELL DOES THIS PROJECT GENERATE CREDITS?
As stated above, some projects might miscalculate their credits or not fully guarantee additionality or permanence.
To assess additionality, carefully read through the project documentation. Assess local environmental regulations that could impact the project. Perhaps there were regulations that would have already prevented a forestry project from cutting down trees; or regulations that otherwise required a facility to capture and destroy methane. To assess permanence, think about the risk of a project potentially failing or being unable to continue to generate credits in the future. Fires, typhoons, droughts, or changes to the natural resource market are risks that could alter whether the project continues to reduce or remove GHGs.
Additionality: the promise that the emission reductions generated by the project would not have happened without the financial support of the carbon offsets.
Permanence: the promise that the carbon reduced or captured is stored in a permanent or near permanent way.
2. HOW TRUSTWORTHY ARE THE PROJECT CONSTITUENTS?
It is also important to consider the credibility of the organizations who manage the carbon offset project, especially because you cannot supervise the project directly and the project may have other social or environmental performance issues outside of its ability to generate offsets. O’Rourke adds that doing due diligence also involves understanding who you are buying from, for example, by running a background check on the project developers or owners.
“Especially for larger buyers who could suffer reputational risk, it is helpful to understand exactly who you’re buying from to get a sense of whether or not they have a good sustainability performance,” O’Rourke says. “Look at whether they have good labor practices? Do they have frequent health and safety compliance issues? Are they good environmental stewards? Do they have environmental justice concerns?”
3. WHAT OTHER CO-BENEFITS DOES THE PROJECT GENERATE?
You may also want to consider other sustainability benefits such as meeting water needs, biodiversity protections, or other sustainable development goals as well. “Often these projects are generating many different social goods beyond mitigating climate change, and this makes them attractive to buyers” advises Dr. O’Rourke.
Where can I find some additional information or guidance on Carbon Offsets?
The following list of sources is not comprehensive, but a good starting point:
Carbon offset and carbon market resources from various credible organizations: